More than 10,000 people in Songming and Yiliang counties in Yunnan province , have been without drinking water since Sunday after 120 tonnes of phosphate-laced mud was dumped on farmland, contaminating the water table.

An official from Songming County Environmental Protection Bureau said his agency was alerted to the contamination on Sunday after aquaculture farmers spotted dead fish in the water.

Investigators traced contamination to waste mud a farmer obtained from a chemical company.

The official said farmer Zhou Shunfu had 20 truckloads of the poisonous mud ferried from a chemical factory owned by the Nanlin Group to his farmland in the hope of drying the waste and using it as fertiliser.

But pollutants leached into the soil contaminating underground water, the sole source in the area for drinking and fish farming.

Zhou has been detained by police and is likely to face criminal charges pending an assessment of the scale of contamination and losses incurred.

A fish farming administration's investigation found fish farmers had collected more than 20 tonnes of dead fish with a market value of 1.36 million yuan, reported Du Shi Shi Bao, a Kunming newspaper.

It is not clear how Zhou managed to obtain the waste, but the official said the chemical company was also under investigation 'as hazardous materials like the mud should only be handled by certified treatment companies'.

In the wake of the pollution, workers have been trying to neutralise the contamination by mixing the affected soil with lime and water.

The official added that the source of the pollution had been brought under control, but he refused to give a time frame for the resumption of drinking water supplies.

'We have tested the water on a regular basis and the results show that the quality of underground water is getting better, although we don't know how long it will take for it to get back to normal,' he said.

Some residents in 10 villages in the two counties have been forced to walk several kilometres to fetch water from unaffected areas.

Fire brigade trucks have been deployed to transport clean water to the villages.